How to Create a Business Plan

Most aspiring entrepreneurs looking forward to acquiring a business loan or developing their business must write a business plan. After all, an incredible business plan assists you in outlining your goals and achieving them at the same time. It acts as a management tool and helps you develop strategic decisions, analyse results, and showcase how you will probably execute your plans and make your business grow significantly.

Are you planning to pitch your business idea to potential investors or start a business? Ensure you write a business plan to increase your success chances. Writing a business plan is never complex and does not need much. Therefore, this article will guide you on how to write a business plan without any issues. You can also opt to download a free business plan template when writing one.

So, how do you write a business plan?

Below are several steps that will guide you write a business plan without complexity. These steps include:

Step 1 Executive summary

This step makes the most vital section of your entire business plan because it serves its unique plan, similar to a business proposal. It summarises the content you are likely to be presenting in your whole business plan. In addition, it gives you a chance to introduce yourself and your brand. Concisely describe yourself, what your business plan addresses, and the goals you want to complete. The executive summary needs you to be as brief as possible. Ensure your sentences are short, clear, and straightforward. Avoid being too detailed.

Step 2 Company description

The company description is relatively straightforward. When describing your company, start with your business and founders' names. After that, tell the background story of your business, including the history of the people who initiated it. Your background history should entail the mission statement, the purpose of the business, location, and year. These elements usually offer a magnificent image of your company and enable investors to better understand your company's objectives. On the other hand, your mission statement should be emotional and inspirational. And the goals should be time-bound, realistic, achievable, and specific.

Step 3 Services and products

In this section, you need to discuss your services and products. You must describe your services and products by mentioning the potential names of products and services. Similarly, it would help if you predicted any questions that could arise from someone unfamiliar with your company. Ensure you answer these questions appropriately to avoid missing out on important information. Suppose you are still enhancing your idea. Describe what stage you have reached and the steps remaining to call it off. Remember to add product image diagrams, among other visual components that might be required. Lastly, end this specific section by mentioning your pricing plan. In addition, the pricing plan should include the profit you make on every unit, the charges of the end services or product, and materials costs.

Step 4 Market analysis

This step is a lengthy section of the business plan. It requires you to do market research, jot down your findings and draw conclusions regarding the points below:

Industry background:

Discuss the background industry and its current status.

Competitor review:

Ensure you shortlist and analyse the top competitors and how you are likely to manage to compete with them. You can quickly achieve this by conducting a SWOT analysis, which will enable you to write each business's threats, opportunities, weaknesses, and strengths.

Entry barrier:

Briefly explain what makes it challenging for aspiring entrepreneurs to enter such businesses. Explain whether it is because of patent, specific, or starting cost.

Target market:

Here, you must provide information regarding your target market. Describe your clients using the market demographics, like occupation and age. Based on the abovementioned points, assess your business and determine whether it qualifies all of them; this will enable you to recognise your advantages and the demand for particular services and products. And how to handle your target audience.

Step 5 Initiate a sales and marketing strategy:

Developing strategies make an essential part of your company. Therefore, you must revisit topics such as the existing segments of the customer, appropriate target market, and value proposition. After that, you can add the plans you will be initiating to attract a new business and the tactics you will develop to expand your business. Remember retention strategies, advertising, and promotion channels. These strategies will assist you in reinforcing your strengths and making you unique among your competitors. Showcase what you have accomplished and what you can do if given resources.

Step 6 Organisation and management:

Indicate how your company will be structured and who will be behind its success; this entails the stakeholders, the executive team, and the founder. Remember that stakeholders include the head of departments, shareholders, and the board of directors and advisors, among other team members. You might not have hired them, but you can still showcase your management and organisational skills. You can display this structure via stakeholders' visual layout pyramid or diagram.

Step 7 Financial projection:

You must know how you will manage to sustain your business financially for your company and clients. This section needs you to generate questions regarding the profit you are likely to make in a year and more years to come, when to start earning a profit, and the amount of funding you need from the investors. Similarly, budgeting will help you manage your finances and maintain your expenses and income truck, making settling your obligatory taxes easier.

Step 8 Additions:

This step is the final section of writing a business plan, and it features additional information to help readers get the entire image of your company. This section includes details supporting your business plan; this part incorporates appraisals, insurance, incorporation articles, contracts, patents, trademarks, and licenses.

When do you require a business plan?

There are different occasions when you might need a business plan. These occasions include:

1 - When your growth is slow, and you feel you need to change.

2 - When you are retaining, hiring, and attracting top talent.

3 - If you are looking for a new co-founder or partner.

4 - When seeking loans, investments, and funding.

Tips for initiating an inviting business plan

Here is an overview of tips you must consider when creating a business plan:

Utilise a business plan software

Writing a business plan is a challenging task. However, it is crucial for anyone expanding or commencing a business. Luckily, various tools assist you in developing one from the time you start planning, creating graphics, drafting, and syncing your financial data. Before you write your business plan, ensure you access this software to develop a detailed plan within a short duration.

Maintain your voice, style, and tone

A single individual can create this business plan and take the sufficient time to edit it appropriately.

It should be concise and clear

Your business plan must be concise and clear. And should not exceed 15-20 pages. Therefore, if you have extra documents that might be perfect for your target audience, ensure you add them under appendices.

Research thoroughly

A significant part of your business plan needs thorough research, especially from independent sources. Thus, ensure you invest time to understand what you are selling, the demand for such services and products, and if there are any competitors.

Have a clear objective

For your business plan to succeed, you must feature clear goals or objectives to get investors to fund your project.

Understand your audience

Before writing the business plan, ensure you understand who will be reading it. These are your target audiences; this will help you use appropriate language and detail your information executively.

Conclusion

Most people find it challenging to create a business plan, but they can comfortably develop an impressive business plan with the guide above. Furthermore, you can use a free business plan template to make the entire process successful. This written document can show potential investors, banks, and partners whenever you plan to raise finances. Additionally, it helps your business to grow significantly.